Espoo, Finland – Nokia has today filed its Annual Report on Form 20-F for 2022 with the U.S. Securities and Exchange Commission. Nokia has also published its Nokia in 2022 Annual Report, which includes audited financial statements, the annual review by the Board of Directors, Nokia’s corporate governance statement and the Remuneration Report for the governing bodies for 2022. Additionally, Nokia updated its capital management policy with a focus on sustaining investment grade rating and improving shareholder returns consistent with the performance of the business. Nokia now targets to maintain a net cash position in the range of 10-15% of net sales.
Updated capital management policy
In today’s publication of Nokia’s Annual Report, the company is announcing an evolution in the company’s cash management policy. In recent years, Nokia has operated with a cash policy to enable it to rebuild the company’s cash position through strong free cash flow generation in 2020 and 2021 and then reinstate shareholder distributions through both a dividend and a share buyback program. Investment in research and development (R&D) has been reinforced to strengthen technology leadership and has delivered improved product competitiveness and put the company on a path to deliver sustainable and profitable growth. These improvements have also now recently been recognised by credit ratings agencies and seen Nokia return to investment grade rating at S&P Global (which upgraded Nokia on 8 February 2023) having already been investment grade rated at Fitch (since 2018).
Nokia’s previous target in terms of cash management was to maintain a gross cash position equivalent to at least 30% of net sales. Going forward Nokia will target to maintain a net cash position in the range of 10-15% of net sales. Nokia intends to maintain a net cash position around this level to ensure it can continue to invest in the necessary R&D to maintain and further improve its technology leadership, fund working capital requirements in support of the company’s growth ambitions and to maintain some flexibility for bolt-on acquisitions.
At the end of 2022, Nokia held a net cash position of approximately 19% of net sales. Nokia is not imminently planning to take action to align this with its target considering the on-going macro-uncertainty, expected growth, and working capital requirements of its business in 2023; along with already announced dividend and share buyback plans for this year. However, assuming the expected significant improvement in cash generation in 2024, Nokia would then look to start acting (such as through increased shareholder returns and/or potential bolt-on acquisitions) to align the net cash position with the long-term target.
The Annual Report on Form 20-F and Nokia in 2022 Annual Report
The Annual Report on Form 20-F and Nokia in 2022 Annual Report will be available in PDF format at www.nokia.com/financials. Shareholders may request a hard copy of the reports free of charge through Nokia’s website. The corporate governance statement is available also at www.nokia.com/about-us/company/leadership-and-governance and the Remuneration Report at www.nokia.com/about-us/company/leadership-and-governance/remuneration/.
The financial statements are also published in XHTML format in accordance with the European Single Electronic Format (ESEF) reporting requirements. In accordance with ESEF requirements, the consolidated financial statements are marked with iXBRL tags. The audit firm Deloitte Oy has provided an independent auditor’s report on Nokia’s ESEF financial statements based on a reasonable assurance engagement it has performed in accordance with International Standard on Assurance Engagements ISAE 3000. The ESEF financial statements in Finnish are available in the zip file attached to this release and at www.nokia.com/luvut.
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Nokia publishes its Annual Report and refines capital management policy Submission Details
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